Relaxo Footwears Ltd - Q4 FY21 Result Update - YES Securities

(Rating: NOT RATED, CMP: Rs1,032)

View - While we like the business given the headroom for premiumization and distribution-led growth in the long term, valuations at 68x look expensive in the current backdrop. We would therefore expect an underperformance from the stock going forward.

Results summary - Revenue up 38%, EBITDA up 69% PAT up 97% in 4QFY21; margin expansion of 400bps due to operating leverage, better product mix and lower SGA costs; ended FY21 with a marginal 2% decline in revenue, 6% growth in volumes, 21% growth in EBITDA and 29% growth in PAT; Rs 513 crs CFO and Rs 142 crs capex in FY21; FY21 ended with 398 EBOs which contributed 7% of revenue, exports contributed 4% of revenue, MT/eCom share currently at 8-9%.

Margin outlook - Margins above normalized levels in FY21 due to benign input costs, manufacturing efficiencies, due to savings on sales promotion and ad spends, travel and other discretionary expenses; while travel expenses will remain low in current environment, expect an increase in brand building costs in FY22 in addition to RM inflation and competitive intensity which will bring margins below 20%.

Shares of RELAXO FOOTWEARS LTD. was last trading in BSE at Rs.1102.9 as compared to the previous close of Rs. 1034.45. The total number of shares traded during the day was 80531 in over 6470 trades.

The stock hit an intraday high of Rs. 1144 and intraday low of 1034.8. The net turnover during the day was Rs. 86638719.

Source : Equity Bulls

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